Kisan Vikas Patra (KVP) – All you need to know about it
Kisan Vikas Patra is one of the most popular post office saving schemes in India. This is famous among those who are looking for capital appreciation with the least amount of risk. This scheme is available in the post office, and if you purchase it between July 1, 2021, and September 30, 2021, your one-time investment will get doubled in approximately 10 years 4 months (124 months). For example, an investment of Rs. 6000 in Kisan Vikas Patra will fetch you Rs. 12,000 terms at the time of maturity.
India Post launched the Kisan Vikas Patra savings scheme in 1988 to facilitate long-term financial savings plans among people who wanted assured returns. As per the website of India Post, the term of KVP is 124 months (10 years and 4 months) if you invest from July 1, 2021, to September 30, 2021. While the minimum investment amount is Rs. 1000, there is no upper limit. They also claim that the invested amount will double at the end of the 124th month.
Why Kisan Vikas Patra?
This savings scheme was primarily introduced to help farmers save for a longer tenure, but now, anyone who fulfills the eligibility criteria can invest as per the rules of Govt of India, individuals who are investing above Rs. 50,000 are required to provide their PAN card as proof, and for those investing above 10 lakhs, proof of income (pay slips, bank statement, ITR copies, etc.) is mandatory. In addition to these, one must also submit a copy of their aadhaar card as proof of identity to invest in the Kisan Vikas Patra savings scheme.
Kisan Vikas Patra certificates are available in three different account types, which are as follows:
- Single Holder: The KVP certificate is issued to an adult. In the case of a minor, the certificate is allotted under their name.
- Joint ‘A’ Type: The KVP certificate is issued in the name of two individuals, both being adults. At the time of maturity, both account holders are eligible to receive the payout, but only one will be able to receive the proceeds in the event of the death of any account holder.
- Joint ‘B’ Type: The KVP certificate is issued in the name of individuals, both adults and at the time of maturity; either account holders or survivors shall receive the payout.
Features and Benefits of Kisan Vikas Patra (KVP):
KVP is one of the oldest savings schemes started by India Post, and it is still relevant due to its unique features and benefits. Read below to understand what they are.
- Guaranteed Returns: Even if there are any market fluctuations, the returns of Kisan Vikas Patra are stable and are not affected. It is the safest investment avenue for all those who look for guaranteed returns on their capital investment.
- Investment Protection: Unlike other investment products which are susceptible to making losses, KVP does not pose any risk to your investment. You can be sure to receive double the amount at the time of maturity.
- Interest: The interest rates of Kisan Vikas Patra vary depending on the number of years that an account holder stays invested in KVP from the time of purchase. While the current interest rate is 7.6% per annum for the financial year 2019-2020, it may increase or decrease in future years.
- Tenure: The maturity period of Kisan Vikas Patra is 124 months, post which the certificate matures with the amount doubling. If you choose to withdraw the maturity amount later, it shall continue to accrue interest until it is withdrawn.
- Tax: The investments made into KVP are not eligible for the 80C deduction, but the amount withdrawn after maturity is exempted from Tax deducted at source or TDS.
- Premature Withdrawal: The KVP account has a maturity of 124 months. Any advance withdrawal of money is not allowed unless the account is closed by an auditor or by a court decision.
- Easy Availability: Anyone can invest in KVP with as little as Rs.1000 in multiples of Rs. 1000 without any upper limit at their nearest post office. Hence, it is quite simple for individuals to decide and make their investments without any complex entry barriers.
Eligibility for KVP scheme
Any Indian citizen over 18 years old can buy Kisan Vikas Patra certificates from their nearest post office. This is extremely helpful for those in rural India, who do not have a bank account and can also be bought for minors under the name of an adult. This being a long-term savings scheme, KVP is a very good option for all those who might not require cash immediately and have long-term goals in mind.
How to invest in Kisan Vikas Patra
If you are looking to invest in the Kisan Vikas Patra scheme, follow the below steps.
Step 1:
- Visit your nearest post office.
- Collect the application form, Form A.
- Fill the form with all the required information.
Step 2: Submit the filled-in form to the post office or the bank.
Step 3: If investments in KVP are made through an agent, the agent must complete Form A1, which is also available on the internet.
Step 4. Since the KYC process is compulsory, one needs to produce their ID proof and a copy of their address (PAN, Aadhaar, Voter ID, driver’s license, or passport).
Step 5: After the document is complete, you may make your first deposit into the account, which can be made through cash, cheque, pay order, demand draft, etc., favoring the postmaster.
Step 6: Once the payment is realized, your KVP certificate shall be issued. This has to be kept safely as it is necessary to be produced at the time of maturity. You may also request them to send the certificate by email.
Kisan Vikas Patra is surely a valuable investment to help you achieve your long-term goals without the risk of losing your investment capital or fear of fluctuations in the market. Since they are available from the nearest post office, it is accessible to people from all walks of life, helping them build a good financial corpus for their future.
